Established companies, of course, would like to see high barriers for new companies and therefore strive to build and maintain their competitive advantages. New companies tend to look for "cracks in the walls" of the barriers.
Potential barriers to entry include ...
- Switching costs ... customers tend to stay put and not take the risk and expense of trying products and services from new companies
- Government regulations ... some products require government approval (prescription drugs, for example) that make it difficult or impossible for new entries to duplicate
- Contrived differentiation ... name brands tend to hold customers even if newer products are superior
- Cost advantages independent of scale ... convenience of purchase may win a sale
- Economies of scale ... the lower price for a comparable product tends to win the sale
- Product differentiation ... better products, services, and value tend to prevail ... if there is any one particular barrier upon which a new company could focus to find a "crack in the barrier wall", this may be it!